Rising professional indemnity (PI) premiums are impacting fees and forcing some operators out of the market. According to the Financial Planning Association (FPA), some members’ PI premiums have increased by up to 1000%. CEO Ken Breakspear says the Australian Competition and Consumer Commission report into liability crisis released earlier this month didn’t go far enough in highlighting the impact on his members.

“All FPA members have experienced steep rises in PI insurance, with more than half having trouble securing cover and some receiving quotes 1000% higher than the previous year’s premiums,” he said. “These increases will need to be recovered by increases in service fees which ultimately affect the cost of financial planning for consumers.”

Saying a number of small planners will inevitably have to close their doors, Mr Breakspear says up to 20 have already left the industry because of the increases.